Banco BPM says surprise Unicredit bid undervalues potential

Italy’s Banco BPM has rejected a €10.1bn takeover bid from UniCredit, saying the current offer undervalues it.

In a statement, Banco BPM said the bid from the larger Italian lender “does not reflect in any way the profitability and further potential to create value for Banco BPM shareholders”.

The statement comes after a board meeting on Tuesday, where Banco BPM officials discussed UniCredit’s offer from Monday.

In a surprise move, UniCredit earlier announced it would offer 0.175 of its own shares for each share in Banco BPM, valuing the stock at €6.657 each. That represents a 0.5% premium on the closing price of Banco BPM shares recorded on Friday.

Tuesday’s statement went on to say that UniCredit’s offer was unsolicited. It reiterated the board had full confidence in Banco BPM’s current business strategy.

Concerns about moving into Germany

The statement also underlined concerns about potential job losses, reduced competition, and mentioned UniCredit’s possible expansion in Germany.

The lender has been increasing its stake in Germany’s Commerzbank, a move facing fierce opposition from Berlin.

Many in Germany fear a merger could lead to job cuts and the hampering of lending to small and medium-sized businesses.

Banco BPM’s press statement argued that a potential UniCredit takeover “exposes…stakeholders to the risk associated with the outcome of the expansion initiatives launched by UniCredit in Germany”, diluting its exposure to high-growth regions.

More to come…